Healthcare Innovation Leader, Dr. Jack Lord Provides an Insurer's Perspective

All the hard questions on healthcare coverage and reimbursement.

by Hannah Deming and Kira Maker

As the healthcare field tries to anticipate what a post-Affordable Care Act (ACA) America will look like, we had the privilege of speaking with healthcare innovation leader Dr. Jonathan "Jack" Lord. From 2000 to 2009, Dr. Lord was the first Chief Innovation Officer and Senior VP at Humana, one of the nation's largest health insurers with about 10.6 million members during his tenure. He introduced SmartSummary Rx, the US' first monthly prescription benefits summary tailored to indi- vidual Medicare members. He also developed patient-centered wellness initiatives, including national bike-sharing programs; HealthMiles, a fitness rewards program, partnering with Virgin Group; and Games4Health, a series of mobile apps designed to help people engage in healthy activities. He is currently the chairman of Dexcom's Board of Directors. Dr. Lord is also a forensic pathologist with over 20 years of medical-practice experience. Drawing on these diverse experiences, Dr. Lord gave us some insight into changes in healthcare coverage and reimbursement, especially from an insurance company's perspective. He discussed treatment decisions, healthcare reform, what is needed for better reimbursement of diabetes technology, and how digital tools can be used to improve health. By the end of the interview, we came to have a deeper appreciation of the challenge in Dr. Lord's simple five-word mantra for all new therapies and technologies – "be better and cost less" – and the complexities entrenched in the three little letters A-C-A.

Coverage and Prescription Decisions

Hannah: The New York Times had an article in which Kaiser Permanente CEO George Halverson said, "We think the future of healthcare is going to be rationing or reengineering." Would you agree with that?

Dr. Lord: We're going to have to figure out what's the right method for saying which care gets supported, which care gets paid for, and which care is the right care for individuals. The hope is that with personalized medicine, we could deliver the right medication at the right dose to the right patient more accurately than we do now – depending on how it gets implemented in the healthcare system. That is one hope. But again, I think it is a very, very complex world. It's not simple and it will take some real conviction to make fundamental changes in the healthcare system.

Hannah: The FDA places a lot of focus on randomized controlled trials, which often aren't very true to real life. It seems like there is a difference in what the FDA is looking for versus what insurers want to see. How can we move forward to resolve this difference?

Dr. Lord: Well, it's a fabulous question, and it's one of those public policy issues that needs to be brought to light. I think that we would all benefit from the development of simulation models. I always like to point out that when designing new airplanes, we know how well a plane will fly before it ever takes off the ground because the Federal Aviation Administration worked with the industry to develop simulators to show what wing designs, engine designs, etc., look like. In healthcare, we probably need to move beyond the randomized controlled trial and develop simulations that not only look at a drug or device in isolation, but also look at what happens in actual practice with different ages and cultures to understand the effectiveness of these options. That's a completely different model; it will take a very long time for that to come into play, but I think it's a great question and an important policy issue to service.

Hannah: In your opinion, what should the relationship be between insurers, healthcare providers, and patients when making treatment choices?

Dr. Lord: I've always believed that patients need to be full partners in the decision-making process. One of the things that need to change is that patients aren't getting to make a complete choice of what they get. At Humana, one of the benefit designs we implemented was Rx Impact, a pharmaceutical benefit where patients were actually given an amount of money for prescriptions. If they could find prescriptions that cost less, we would let them keep whatever money they saved; and if they found prescriptions that cost more, they would pay the difference out of pocket. In that way, the insurance plan got out of the middle.

Hannah: We hear that sometimes private insurers are uncertain of the value of doing preventative work with their patients; that they are concerned Medicare will reap the benefit of that preventative work as opposed to themselves. How true is that characterization, and what are possible ways to address this issue?

Dr. Lord: First, the private insurer field has a pretty wide variety of entities; there are probably about 900 private insurers in the country. I think that among the major players – the United Healthcares, Aetnas, and Humanas of the world – that conversation doesn't come up. As much as the health plans have been criticized for focusing on profits over patients, the reality is that plans are trying to do the right thing in a world where the right thing is balancing the costs that companies or individuals pay for health insurance with what services are provided. I've never been a part of a conversation that said, "We don't want to do something, because the longer-term beneficiary is going to be Medicare." I've just never seen that play out.

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Last Modified Date: July 29, 2013

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by Brenda Bell
As I mentioned in an earlier post, one of the benefits that made it cost-effective for me to go with the real healthcare (HSA) plan rather than the phony (HRA) plan is that my company is now covering "preventative" medicines at $0 copay. The formulary for these, as stated by CVS/Caremark (my pharmacy benefits provider), covers all test strips, lancets, and control solutions. I dutifully get my doctor to write up prescriptions for all of my testing needs, submit...
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